Job market probably continued gains in January

A Chase bank branch in California was among many employers in January that altogether added 160,000 workers to payrolls.

Published: 27 January 2013 09:24 PM

Updated: 27 January 2013 09:37 PM

The job market in the U.S. probably kept making headway in January even in the face of Washington’s budget battles, economists said before reports this week.

Employers added 160,000 workers to payrolls last month after a 155,000 December increase, according to the median forecast of 67 economists in a Bloomberg survey before a Friday Labor Department report. The average monthly gain over the past two years was 153,000. Other data this week may show manufacturing is stabilizing, housing is improving and consumers are spending.

Sustained gains in hiring are giving incomes a lift, cushioning workers from the sting of higher payroll taxes. Nonetheless, bigger employment increases are needed to drive down a jobless rate that Federal Reserve officials, who meet this week for the first time this year, say is too high.

In the past year, stable job growth has helped reduce unemployment, enabling consumer spending, about 70 percent of the economy, to advance. Analysts forecast a Thursday report from the Commerce Department will show household purchases rose 0.3 percent last month after increasing 0.4 percent in November. The same report may also show incomes climbed 0.8 percent, the most in a year, partly the result of firms pulling dividends forward to avoid higher taxes in 2013.

Rising household purchases failed to fully offset weak overseas demand and smaller gains inventories in the fourth quarter. The nation’s gross domestic product advanced at a 1.2 percent rate in the fourth quarter, the weakest in almost two years, economists estimate before Wednesday figures from the Commerce Department.

Manufacturing shows signs of emerging from a lull that began in the middle of last year. Economists estimate a Commerce Department report will show durable goods orders climbed in December. A Friday report from the Institute for Supply Management will show factories expanded for a second month in January, according to the survey median.

The housing market represents a bright spot for the economy. Home prices increased 5.5 percent in the 12 months through November, the most since 2006, economists project a Tuesday report from S&P/Case-Shiller will show.

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